Sears, Kmart Offering No Layawys With No Fees Year-Round

Starting Friday, Kmart and Sears will drop all layaway fees year-round and allow shoppers to put any item on layaway at nearly all of their stores, parent company Sears Holdings told USA TODAY on Thursday.

What's starting to sound like a layaway war is good news for consumers, says Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling.

"I love layaway," Cunningham says. "It's a terrific tool for anyone, but particularly someone who knows they need to be disciplined around the holidays." Still, shoppers are spending money they haven't earned yet, Cunningham says. "You can still dig that deep financial hole," she says.

Cunningham recommends shoppers ask if they can get the sale price if a product is discounted while on layaway and what happens if they decide they don't want or can't afford to keep making payments.

At Kmart and Sears, consumers can get the sale price if a product is marked down within seven days of being placed on layaway. They can also get their money back if they forfeit their layaway, but they are charged a $10 penalty.

Pushing layaway:

Walmart. The mega-discounter is reducing layaway fees to $5 from Sept. 16 to Dec. 14. Walmart dropped layaway for anything but jewelry in 2006 but brought it back last year to include toys and electronics. Small home appliances and big-ticket sporting goods are eligible now, too. Customers who pay off their layaway get a $5 Walmart gift card.

Says spokeswoman Sarah Spencer: "You get your money back if you see it through."

Toys R Us. The toy retailer's fee drop is valid for items paid off by Dec. 16. Toys R Us revived its layaway program in 2009 after a five-year hiatus and expanded it last year to include nearly everything in the store.

Troy Rice, VP of stores and services, says layaway is popular for large, hard-to-hide gifts such as bikes and power wheels, "because the kids won't find it if it's at Toys R Us."

Best Buy. For a 5% fee, the electronics retailer offers layaway in select stores but not for items on sale or some cellphones.

T.J. Maxx and Marshalls offer layaway in some stores, and charge a $5 fee. There's a $5 penalty is the order is canceled.

Kmart spokeswoman Shannelle Armstrong-Fowler says the layaway overhaul was not in response to Toys R Us or Walmart. Kmart was in the layaway game before them, and never dropped out. "We have been providing this service to our customers forever," she says.